WASHINGTON — Gas prices aren’t the only thing on the rise from the crisis in Ukraine, wheat and corn prices are also headed north. That could mean higher price tags in the grocery store.
In the United States we have tons of farmland and produce a large amount of the world’s grain. Why would this affect us?
Why is the crisis in Ukraine affecting wheat and corn prices?
Ukraine and Russia supply around 30% of the world’s grain. Grain is measured at global level, much like oil. So when global supply shrinks, prices go up everywhere.
WHAT WE FOUND:
Our experts explained that both Ukraine and Russia are large sources of the world’s grain supply.
“Russia and Ukraine export nearly 30-35% of all grain produced in the world,” Bill Hoagland said. “Shutting down the exporter those out of the ports there, will materially affect the price of wheat, and corn.”
If the conflict continues, Ukrainian farmers might not be able to harvest wheat and ship it out because of port closures. Sanctions on Russia restrict its ability to sell grains, too. All of those supply chain issues combined will restrict global supply.
But what about here at home? How much wheat and corn does the US import? The answer is: none.
“We produce more than we need domestically,” Welch said.
“These are global markets. So, a disruption in one country is going to disrupt the global market for this commodity,” Ridley said.
Grain– wheat and corn- just like oil, gets measured at a global level.
“Any impacts on prices and availability that you're going to see, are going to spill over to US markets,” Ridley said.
“It matters because it's driving prices up considerably, just in response to what's going on globally,” Welch said.
Add that to already high gas prices and high transportation costs, you’ve got a recipe that could lead to higher grocery bills.
If the conflict continues and supply is still restricted, our experts say a loaf of bread could cost 10 to 50 cents more.